Marketing Planning Basics:

BCG matrix:

A portfolio planning method that evaluates a company’s strategic business unit in term of its market growth rate and relative market share. SBUs are classified as stars, cash cows, question marks or dogs.

The product/market expansion grid:

A portfolio planning tool for identifying company growth opportunities through market penetration, market development, product development or diversification.

Segmentation

Dividing a market into smaller groups with distinct needs, characteristics, behaviour that might require separate marketing strategies or mixes.

Targeting

The process of evaluating each market segment attractiveness and selecting one or more segment to enter.

Positioning

Arranging for a market offering to occupy a clear, distinctive and desirable place relative to competing products in the mind of the target consumers.

Four Major Requirements for Effective Segmentatio

A) MeasurabilityCan we understand Consumer opinion, buyer behaviour, Consumer requirements.

B) Accessibility defined as the degree to which a desired market segment can be reached and served.

Are we able as Marketing Management to advertise and promote our products to this specific group. Are we able to provide a product/service solution to suit specific customers' distinctive needs?

(C) Substantiality defined as the degree to which a market segment is sufficiently large or even profitable. Do we make a Marketing effort that will not "pay" us at the end of the day?

D) Attractiveness of a market segment is a requirement that worth our attention regarding current sales volumes and values, subsequent contribution margins and eventual product/market growth.

Undifferentiated (mass marketing)

A market coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer.

Differentiated (segmented marketing)

A market cover strategy in which a firm decides to target several market segments and designs separate offer for each.

Concentrated (niche marketing)

A market coverage strategy in which a firm goes after a large share of one or few segments or niches.

Competitive advantage

An advantage over competitors gained by offering greater customer value, either through lower prices or by providing more benefits that justify higher prices.

Push strategy

A push promotional strategy involves taking the product directly to the customer via whatever means to ensure the customer is aware of your brand at the point of purchase.

Examples of push tactics

Direct selling to customers in showrooms or face to face Negotiation with retailers to stock your product Packaging design to encourage purchase

Pull strategy

A pull strategy involves motivating customers to seek out your brand in an active process.

Examples of pull tactics

Advertising and mass media promotion Customer relationship management Sales promotions and discounts

Objective-and-task Method:

The most logical budget-setting method is the Objective-and-task Method, whereby the company sets its promotion budget based on what it wants to accomplish with promotion.

This method entails –

1. Defining specific promotion objectives2. Determining the tasks needed to achieve these objectives3. Estimating the costs of performing these tasks. The sum of these costs is the proposed

promotion budget.- This method forces management to spell out its assumption about cost & promotion

results.

Vertical Marketing (VMS)

A distribution channel structure in which producers, wholesalers, and retailers act as a unified system. One channel member owes the others, has contracts with them, or has so much power that they all cooperate.

Horizontal marketing system

A channel arrangement; in which two or more companies at one level join together to follow a new marketing opportunity.

Levels of product and services

Firstly product planner needs to think about product and service on three level. Each level adds more customer value.

Core customer product: The dominant benefit or satisfaction that a customer expects from a good or service he or she buys.

Actual product: features, design, packaging, quality level, brand name.

Augmented product: after sales service, warranty, product support, delivery and credit.

The CORE product is NOT the tangible physical product. You can't touch it. That's because the core product is the BENEFIT of the product that makes it valuable to you.

With car example, the benefit is convenience i.e. the ease at which you can go where you like, when you want to.

Another core benefit is speed since you can travel around relatively quickly.

The ACTUAL product is the tangible, physical product. You can get some use out of it.

Again with the car, it is the vehicle that you test drive, buy and then collect. You can touch it. The actual product is what the average person would think of under the generic banner of product.

The AUGMENTED product is the non-physical part of the product. It usually consists of lots of added value, for which you may or may not pay a premium.

So when you buy a car, part of the augmented product would be the warranty, the customer service support offered by the car's manufacturer and any after-sales service. The augmented product is an important way to tailor the core or actual product to the needs of an individual customer.

Branding:

A brand is a name, sign, term, symbol, design or a combination of these that identifies the maker or seller of a product or service.

Labeling:

Labels range from simple tags attached to products to complex graphics that are part of the package.

Product line:

Groups of product that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets or fall within give price ranges.

Product life cycle strategies:

A companies product are born, grow, mature and then decline, just as living things do to remain vital, the firm must continually develop new products and mange them effectively through their life cycles.

Value based pricing

Setting price based on buyers perception of values rather then on the sellers cost.

Cost based pricing

Setting price based on the cost for producing, distributing, and selling the product plus a fare rate of return for effort and risk.

Break even pricing

Setting price to break even on the cost of making and marketing a product or setting price to make a target profit.

A break even point is a point where the total cost is equal to the total revenue.

Break even volume = fixed cist/(price-variable cost)

Market skimming pricing

Setting a high price for a new product to skim maximum revenues layer by layer from the segment willing to play the high price, the company makes fewer but profitable sale.

Market penetration pricing

Setting a low price for a new product in order to attract a large number of buyers and a large market shares.